Western Digital (NASDAQ:WDC) Stock Falls 1.6% – Should You Sell?

Western Digital Corporation (NASDAQ:WDC) was down 1.6% during trading on Tuesday. The company traded as low as $358.26 and last traded at $380.71. Approximately 12,349,972 shares traded hands during trading, an increase of 43% from the average session volume of 8,644,241 shares. The stock had previously closed at $386.94.

Key Stories Impacting Western Digital

Here are the key news stories impacting Western Digital this week:

• Positive Sentiment: Western Digital’s recent results and outlook remain strong. Fiscal fourth-quarter revenue rose 43.8% year over year to $3.75 billion, while adjusted EPS exceeded expectations. Management has projected approximately $4.1 billion in next-quarter revenue and about $4.00 in non-GAAP EPS, supported by cloud demand, higher-capacity drives and AI-generated data growth. Western Digital AI-fueled outlook
• Neutral Sentiment: Investors are positioning ahead of Western Digital’s scheduled October 22 earnings release. Analysts expect very strong year-over-year earnings growth, but the report will need to confirm that recent demand, margins and favorable storage pricing can continue. Western Digital earnings preview
• Negative Sentiment: UBS lowered its price target while maintaining a neutral rating, citing uncertainty over HDD supply capacity and future pricing. The downgrade increased concern that storage demand and margins may not remain as strong as current estimates imply. Western Digital price-target cut
• Negative Sentiment: A broader global chip-sector selloff is weighing on WDC. China’s CXMT reportedly advanced a denser server-memory design, intensifying competitive concerns for memory and storage companies. Investors are also questioning whether massive AI infrastructure spending can continue at its current pace. US chip stocks slide on China competition and AI spending fears
• Negative Sentiment: Reported insider activity shows substantial selling and no insider purchases over the past six months, potentially adding to investor caution, although such transactions do not necessarily indicate a change in the company’s fundamentals.

Wall Street Analyst Weigh In

Several brokerages recently issued reports on WDC. Mizuho set a $590.00 price objective on Western Digital in a research report on Thursday, August 6th. Morgan Stanley restated an “overweight” rating and set a $676.00 target price (up from $650.00) on shares of Western Digital in a report on Thursday, August 6th. Susquehanna lifted their price target on shares of Western Digital from $360.00 to $500.00 and gave the company a “neutral” rating in a research note on Wednesday, July 8th. JPMorgan Chase & Co. upped their price target on shares of Western Digital from $650.00 to $715.00 and gave the company an “overweight” rating in a report on Thursday, July 16th. Finally, TD Cowen increased their price objective on shares of Western Digital from $500.00 to $540.00 and gave the stock a “buy” rating in a research report on Thursday, August 6th. One research analyst has rated the stock with a Strong Buy rating, twenty-one have assigned a Buy rating and six have assigned a Hold rating to the stock. According to data from MarketBeat, Western Digital currently has an average rating of “Moderate Buy” and a consensus price target of $618.63.

Western Digital Trading Down 1.6%

The company has a market capitalization of $142.51 billion, a P/E ratio of 15.73, a PEG ratio of 1.68 and a beta of 2.11. The firm’s 50 day moving average price is $453.25 and its two-hundred day moving average price is $476.04.

Western Digital (NASDAQ:WDC) last announced its earnings results on Wednesday, August 5th. The data storage provider reported $3.56 EPS for the quarter, topping the consensus estimate of $3.31 by $0.25. The business had revenue of $3.75 billion during the quarter, compared to analysts’ expectations of $3.70 billion. Western Digital had a net margin of 72.95% and a return on equity of 48.15%. The firm’s revenue was up 43.8% on a year-over-year basis. During the same quarter in the prior year, the company posted $1.66 earnings per share. Western Digital has set its Q1 2027 guidance at 3.850-4.150 EPS. Analysts anticipate that Western Digital Corporation will post 19.65 earnings per share for the current fiscal year.

Western Digital Dividend Announcement

The firm also recently disclosed a quarterly dividend, which was paid on Thursday, September 17th. Stockholders of record on Tuesday, September 8th were paid a dividend of $0.15 per share. This represents a $0.60 dividend on an annualized basis and a dividend yield of 0.2%. The ex-dividend date was Tuesday, September 8th. Western Digital’s dividend payout ratio is currently 2.48%.

Insider Activity

In related news, insider Vidyadhara K. Gubbi sold 1,795 shares of the stock in a transaction that occurred on Friday, September 4th. The stock was sold at an average price of $459.87, for a total transaction of $825,466.65. Following the completion of the transaction, the insider directly owned 80,571 shares of the company’s stock, valued at approximately $37,052,185.77. This represents a 2.18% decrease in their ownership of the stock. The sale was disclosed in a document filed with the SEC, which is accessible through this hyperlink. Also, insider Cynthia L. Tregillis sold 1,007 shares of the firm’s stock in a transaction that occurred on Thursday, August 27th. The shares were sold at an average price of $478.36, for a total value of $481,708.52. Following the completion of the transaction, the insider owned 112,155 shares of the company’s stock, valued at approximately $53,650,465.80. This represents a 0.89% decrease in their ownership of the stock. The SEC filing for this sale provides additional information. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Insiders sold 25,437 shares of company stock worth $11,461,345 in the last quarter. Corporate insiders own 0.20% of the company’s stock.

Institutional Investors Weigh In On Western Digital

Several large investors have recently made changes to their positions in WDC. Mowery & Schoenfeld Wealth Management LLC acquired a new stake in Western Digital in the second quarter valued at $28,000. Dunhill Financial LLC acquired a new position in shares of Western Digital during the 2nd quarter worth about $29,000. Stonehage Fleming Financial Services Holdings Ltd bought a new stake in shares of Western Digital in the 2nd quarter valued at about $31,000. Gables Capital Management Inc. bought a new stake in shares of Western Digital in the 2nd quarter valued at about $32,000. Finally, Ares Financial Consulting LLC lifted its stake in Western Digital by 45.5% in the 2nd quarter. Ares Financial Consulting LLC now owns 80 shares of the data storage provider’s stock valued at $51,000 after purchasing an additional 25 shares during the last quarter. Institutional investors and hedge funds own 92.51% of the company’s stock.

Western Digital Company Profile

Western Digital Corporation (NASDAQ: WDC) develops, manufactures and supplies data-storage products and solutions. The company’s portfolio is centered on hard disk drives (HDDs) used in cloud and enterprise data centers, personal computers, network-attached storage systems and other applications that require high-capacity data storage.

Western Digital markets products under brands including Western Digital, WD and Ultrastar. Its offerings include enterprise and data-center HDDs, storage products for business and consumer systems, and related technologies designed to help organizations store, manage and access large volumes of data.

Founded in 1970, Western Digital has evolved from a maker of electronic components into a global data-storage company.